Companies registered in Singapore must have at least one shareholder and a maximum number of fifty. The shareholders may be corporate bodies or natural individuals. One resident must act as the manager of the company, but it may also have other local or foreign directors. The managers can only be natural persons, above 18 years old.
A natural person, local resident must be the secretary of the Singapore offshore company. It may not be in the same time shareholder of the company or manager. There is no authorized capital requested at incorporation of an offshore company in Singapore but a symbolic share capital of at least 1 dollar must be deposited.As an impediment, the Singapore legislation is not allowing a foreign entity to self register as an offshore company; the process must be carried by a local professional agency.
The following documents must be presented for the registration of an offshore company in the Companies Registrar of Singapore: the passport copies of the shareholders and the managers, their residential addresses, as well as details regarding the parent company.
First, the name of the offshore company must be approved by the Companies Registrar. If it’s available, it will be reserved until all the registration procedures are finished.
Secondly, the company is registered at the Company Registrar of Singapore and will receive a certificate of registration based on the above documents.
Once this step is completed, a bank account must be set up. Next is the registration for the Goods and Service Tax at the Inland Revenue Authorities of Singapore.
Some activities require using a license which must be issued by relevant authorities. After these licenses and permits have been obtained, the company may start its business.
There are many reasons why the companies choose to open offshore companies in Singapore.
First of all, the registration procedure is very easy and the process is made online so the bureaucracy is almost inexistent.
Another major reason is the small taxes and sometimes their absence related to the company’s activities. For example, the capital gains are not taxable; also there is no tax on dividends.
If a company is formed by less than 20 shareholders (from which one is keeping 10% of the shares), in the first three years the company is subject to a 0% tax rate on the first 100000 Singapore dollars taxable incomes. The profits up to 300000 Singapore dollars are taxed with a corporate income tax of 8.5% and a flat 17% for above 300000 Singapore dollars.
The foreign source income, not delivered in Singapore, is exempt from Singapore fees. Also the foreign source of income that meet certain conditions, received in Singapore may be exempt from these taxes. Please free to address to our Singapore lawyers for consultancy in a wide range of legal matters, including taxation. You can also use our tax calculator in order to see the taxes you must pay in Singapore.
Despite the small taxes and fees, Singapore is not deemed a tax heaven and that is why an offshore company opened here is taken more seriously than in other locations.
Another reason why opening an offshore company is appealing is the fact that the foreign ownership of the company is allowed 100% in all the sectors and no authorization is requested at registration from the Singapore’s authorities.
Foreign investors who have decided to open a Singapore company usually spend more time on deciding the type of structure they will choose. While registering an onshore company has obvious benefits, such as tax incentives for the various sectors offered by the Government and thus offering broader prospects related to the industry the enterpriser wants to invest in, the offshore company can also take advantage from tax exemptions under the conditions seen above. However, most individuals think that an offshore company has less credibility than a company registered in Singapore which is why they might be inclined towards the latter. But once more, Singapore is not considered a tax heaven, so the offshore company will not encounter any difficulties when it comes to doing business in other countries.
When taking into consideration which option is better, it is best to ask our Singapore company formation experts who can offer detailed information about the registration of each type of company. Moreover, we can also assist you with the company registration procedures for both types of structures.
The offshore company is the suitable choice for those seeking to set up a holding company in Singapore. This is also why, among the sectors appropriate for registering an offshore company are: